Telangana High Court
M Srinivas Reddy vs Kodganti Hanmanth Reddy on 24 January, 2024
Author: Nagesh Bheemapaka
Bench: Nagesh Bheemapaka
HON'BLE SRI JUSTICE NAGESH BHEEMAPAKA
CIVIL REVISION PETITION No. 3373 OF 2023
ORDER:
This Revision is directed against the docket order dated 20.9.2023 in O.S.No.13 of 2017 on the file of the Senior Civil Judge's Court at Nagarkurnool.
2. Petitioner is plaintiff and respondents are defendants in the suit filed for specific performance of agreement of sale dated 12.6.2016 and to declare registered sale deed dated 11.07.2016 as null and void and not binding on him and the suit is at trial stage. At the time of marking the documents and further chief-examination of P.W.1, the counsel for Respondents 3 and 4 raised an objection with regard to collection of requisite stamp duty on suit document and pointed out receipt dated 18.06.2016 executed by the 2nd respondent stating receipt of entire amount of agreement of sale. In substance, the objection raised by them is that the agreement of sale should not be read in isolation to collect deficit stamp duty, instead, if any further documents are executed by the parties that disclose handing over possession of property in favour of petitioner, the Court shall decide deficit stamp duty by reading both documents together. Further, as per the contents mentioned in plaint, it is evident that there is delivery of 2 possession of suit schedule property by the 2nd respondent in favour of petitioner, as such the latter shall pay deficit court fee under Article 7 Schedule 1-A of Indian Stamp Act but not under Section 6 of the Stamp Act.
3. Conversely, the counsel for petitioner stated that the contents of agreement of sale dated 12.06.2012 do not disclose delivery of possession of suit schedule property and receipt issued by the 2nd respondent dated 18.06.2016 does not reveal handing over of possession in favour of petitioner, per contra, it says relinquishment of rights and title by the 2nd respondent.
4. The trial Court having considered the submissions of both the parties and upon perusing the material available on record vide docket order dated 20.09.2023 held that the objection raised by the counsel for Respondents 3 and 4 is sustained and permitted petitioner to get the said document impounded to admit the same into evidence.
5. Heard Sri S. Krishna Sharma, learned counsel for petitioner and Sri Venkatesh Deshpande, learned counsel for Respondents 3 and 4.
6. The issue as to whether if agreement of sale coupled with possession requires stamp duty in order to admit the same in evidence is no longer res-integra. Further, the Court being an 3 authority to receive a document in evidence to give effect thereto, the agreement to sell the property is an instrument which requires payment of stamp duty applicable to a deed of conveyance. In B. Ratnamala v. G. Rudramma 1, it was held that:
" A few facts which are germane for answering the reference are: The petitioner had filed a suit in OS No. 15 of 1996 on the file of the Principal Senior Civil Judge's Court, Kurnool seeking specific performance of an agreement dated 14-11-1988 which was marked as Ex.A1 during the trial. On the objection taken by the respondent-defendant by filing an application in IA No.232 of 1988 seeking to impound the said document and levy stamp duty and penalty as a sale deed under Article 47-A of Schedule 1A of the Indian Stamp Act, the trial Court allowed the said application overruling the objection taken by the plaintiff- petitioner herein as to the permissibility of the said objection once the document is marked under Section 35 of the Act and held that the said document is insufficiently stamped and directed the plaintiff to pay the deficit stamp duty and penalty on Ex.A1 or otherwise it was held that the document becomes inadmissible in evidence. Aggrieved by the same, the plaintiff carried the matter in revision before this Court."
13. Thus, it was a specific case where in so many words the Explanation takes in all the situations i.e., delivery of possession before the execution or at the time of execution or after the execution of an agreement and such agreements are deemed to be conveyances for the purpose of imposing stamp duty. Thus the Apex Court had approved the intention of the Legislature in equalising an Agreement on par with a conveyance in the circumstances contemplated thereunder, apparently, the object being to realise the revenue at the earliest point of time on the Agreement akin to sale deeds. Though in different words, in the instant case, the amendment brought in tries to achieve a similar object."
In Gopi Krishna Trivedi v. Sudama Prasad Ojha 2, the Hon'ble Supreme Court observed as under: 1
1999 6 ALD 160 2 (2008) 9 SCC 401 4 " 6. The High Court, after considering the rival submissions and with reference to explanation appended to item No.5 of Schedule 1-A of Stamp Duty on Instruments in West Bengal, concluded as follows:
"The purported letter contains all the terms and conditions of an agreement for sale of immovable property. What were the terms and conditions of the alleged oral agreement are not known. There is nothing on record to show that rights and interest had been created following execution of an oral agreement. What we find is the existence of a document incorporating of terms and conditions of an agreement for sale of an immovable property and receipts acknowledging receipts of consideration amount. The agreements containing terms and conditions for transfer of an immovable property, as such, are required to be properly stamped in terms of the recent amendment of Stamp Act in West Bengal. Adequate stamp not having been paid, the trial court is not right in making the observation that the documents in question are not to be impounded. Since it is the agreement for sale, stamp duty will have to be paid in terms of Schedule 1A as amended. Right and liability having been created or purported to have been created, transferred and extended or recorded, the documents in question will come within the meaning of "instrument" as defined in Section 2(14) of the Indian Stamp Act."
Ultimately, the High Court held that right and liability having been created or purported to have been transferred and extended or created, the documents in question come within the meaning of 'instrument' as defined in Section 2(14) of the Indian Stamp Act, 1899 (in short 'the Act'). Therefore, the revision petition was allowed and the Trial Court was directed to take steps for impounding the documents before having been the documents being marked as exhibits."
Learned counsel for petitioner relied upon the judgment of High Court of Andhra Pradesh in Makineni 5 Srinivas Rao v. Manthena Prabhakar Reddy 3 and relevant paras of the same are extracted hereunder:
" 8. On a careful reading of Explanation I and the Division Bench judgment in B. Ratnamala (: 1999(6) ALD 160 :
1999(6) ALT 159 supra), I am of the opinion that in cases where the agreement does not contain the recital of delivery of possession, it must be examined whether possession 'followed' the agreement. What precisely is the meaning of the word 'followed'? The Oxford dictionary, Thesaurus and Word power guide (Indian edition 2007) explained the meaning of the word 'follow' as "move or travel behind" "go along"
"come after in time or order" "be a logical consequence of" "(follow through) continue (an action or task) to its conclusion".
9. Thus, in the absence of express recital in the agreement on delivery of possession, in order to levy stamp duty chargeable to conveyance in respect of an agreement of sale, it must be shown that possession 'followed' as a logical consequence of the agreement. As explained by the Apex Court in VeenaHansmukh Jain v. State of Maharashtra, 1999 1 SCR 302, by introducing Explanation I, the legislature intended that the stamp duty as applicable to conveyance shall be collected in advance where delivery of possession was involved at the agreement stage itself and execution of conveyance deed remains a mere formality.
10. Where the agreement does not contain the recital relating to possession, what needs to be seen is whether delivery of possession was in contemplation of the parties at the time of execution of the agreement itself. This can be ascertained with reference to the point of time of such delivery. If delivery is simultaneous to or concurrent or contemporaneous with the execution of agreement of sale, it can be safely concluded that the parties have intended delivery of possession though such a recital is absent in the agreement. If on the contrary there is a reasonable time lag between execution of agreement and delivery of possession, it 3 2014(6) ALD 261 6 cannot be construed that such delivery 'followed' the agreement. At best it amounts to delivery of possession "in pursuance of" and not 'following' the agreement of sale."
There is no dispute with respect to the above law on the aspect that if the agreement of sale does not have any recital with respect to delivery of possession, the requirement of stamp duty is unnecessary.
7. In the instant case, admittedly, the agreement of sale dated 12.06.2016 is coupled with receipt dated 18.06.2016 and so also the specific contention at para 4 of the plaint which discloses the fact about delivery of possession of suit schedule property in favour of petitioner. No explanation is forthcoming with respect to specific version at para 4 as to delivery of possession by petitioner as well as specific version in receipt dated 18.06.2016 regarding relinquishing their rights on suit schedule property. Therefore, this Court does not find any reason to interfere with the docket Order dated 20.09.2023 in O.S. No.13 of 2017 upholding the objection raised by Respondents 3 and 4 with respect to collection of stamp duty on suit document/agreement of sale dated 12.06.2016.
8. In the result, the Civil Revision Petition is dismissed. No order as to costs.
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9. Consequently, the miscellaneous Applications, if any shall stand closed.
-------------------------------------- NAGESH BHEEMAPAKA, J 24th January 2024 ksld